- Net revenues of $46 million
- Gross margin of 48%
- Net loss of $3.6 million
- Loss per share of $0.07
- Fourth quarter net revenues of $13 million
- Gross margin of 44%
- Net Income of $.5 million
- Earnings per share of $0.01
SAN LEANDRO, Calif., Mar 03, 2011 (BUSINESS WIRE) -- Energy Recovery, Inc. (Nasdaq:ERII), a leader in the design and development of energy recovery devices for desalination, announced today the unaudited results of its fourth quarter and fiscal year ended December 31, 2010. In the fourth quarter of 2010, ERI achieved net revenue of $13 million, a 17% decrease over the same period last year. For the year ended December 31, 2010, net revenue was $46 million, which represented a decrease of 2% over net revenue of $47 million for the year ended December 31, 2009. ERI reported net income of $0.5 million, or $0.01 per diluted share, for the three months ended December 31, 2010 compared to a net profit of $1.7 million, or $0.03 per diluted share, for the same period last year. Full year net loss was $3.6 million, or $0.07 per diluted share, compared to a net profit of $3.7 million, or $0.07 per diluted share, for the same period last year.
"From our numbers, it is obvious that our industry is experiencing the delayed effects of the global economic downturn," said Thomas S. Rooney, Jr., ERI's President and Chief Executive Officer. "Our industry first felt the effects of the downturn in late 2009 in the smaller OEM project business. Due to the long sales and construction cycle for large desalination plants, the global recession and credit crises did not significantly impact our large project business until 2010. This is a predictable pattern in capital intensive industries. For 2011, our OEM sales team sees increased activity for smaller desalination projects, which in turn is a positive leading indicator for a rebound in new construction of the larger projects over the next 12 to 18 months," he said.
"As ERI's new CEO, my focus in 2011 will be to improve our leadership position in the desalination business by investing in research and development and improving all operational aspects of the company. In addition, I am looking forward to expanding the reach of ERI's technology into other energy recovery applications in markets outside of desalination."
ERI provides the following guidance for 2011:
Fiscal Year 2011
|Estimated Net Revenue||$36 to $45 million|
|Estimated Net Loss||$10 to $7 million|
|Estimated Loss Per Share||$0.19 to $0.13|
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include our belief that sales activity in our smaller, OEM project business will increase in 2011, our expectation that we will expand our business into markets outside of desalination, and statements about ERI's estimated net revenue, net income or loss and earnings or loss per share for the 2011 fiscal year. Because such forward-looking statements involve risks and uncertainties, the Company's actual results may differ materially from the predictions in those forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, delays in, or cancellation of, the construction of desalination plants, political unrest, the inability of our customers to obtain project financing, delays in governmental approvals, changes in end users' budgets for desalination plants or the timing of their purchasing decisions, our ability to ship new products to meet scheduled delivery times, the world economic crisis, our ability to develop other energy recovery solutions for markets outside desalination, and other risks detailed in the Company's filings with the Securities and Exchange Commission ("SEC"). All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements. For more details relating to the risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, please refer to the Company's SEC filings.
Conference Call to Discuss Fourth Quarter 2010 Results
The conference call scheduled today at 1:30 p.m. PST will be in a "listen-only" mode for all participants other than the investment professionals who regularly follow the Company. The toll-free phone number for the call is 1-866-225-8754 or +1-480-629-9722 and the access code is 4406924. Callers should dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at 1-800-406-7325 or +1-303-590-3030, Access Code: 4406924, until Thursday, March 17, 2011. Investors may also access the live call or the replay over the internet at www.energyrecovery.com. The replay will be available approximately three hours after the live call concludes.
Energy Recovery, Inc. (NASDAQ:ERII) designs and develops energy recovery devices that help make desalination affordable by significantly reducing energy consumption. Energy Recovery technologies include the PX Pressure Exchanger(R) device for desalination and the Turbocharger hydraulic turbine energy recovery device and pump for desalination, gas and liquid processing applications. PX devices also reduce the carbon footprint of desalination, saving more than 970 MW of energy and reducing CO2 emissions by more than 5.2 million tons per year worldwide. More than 8,600 PX devices are currently deployed or under contract to be installed at desalination plants around the globe. The company is headquartered in the San Francisco Bay Area with offices near Detroit and in key desalination centers worldwide, including Madrid, Shanghai and Dubai. For more information about Energy Recovery, Inc. please visit www.energyrecovery.com.
Unaudited Consolidated Financial Results
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|Three Months Ended
|Cost of revenue||7,311||6,344||23,781||17,595|
|General and administrative||4,265||4,051||17,038||13,756|
|Sales and marketing||2,243||1,677||8,205||6,472|
|Research and development||1,000||632||3,943||3,041|
|Gain on fair value remeasurement||(2,147||)||--||(2,147||)||--|
|Total operating expenses||5,361||6,360||27,039||23,269|
|Income (loss) from operations||341||3,030||(4,967||)||6,150|
|Other non-operating income (expense), net||(173||)||(5||)||(194||)||54|
|Income (loss) before provision for income taxes||148||3,013||(5,234||)||6,158|
|Provision for (benefit from) income taxes||(348||)||1,360||(1,626||)||2,472|
|Net income (loss)||$||496||$||1,653||$||(3,608||)||$||3,686|
|Earnings (loss) per share:|
|Number of shares used in per share calculations:|
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data and par value)
|Cash and cash equivalents||$||55,338||$||59,115|
|Accounts receivable, net of allowance for doubtful accounts of $44 and $196 at December 31, 2010 and 2009, respectively||9,649||12,683|
|Unbilled receivables, current||2,278||5,544|
|Deferred tax assets, net||2,097||1,466|
|Prepaid expenses and other current assets||4,428||1,741|
|Total current assets||88,198||96,179|
|Restricted cash, non-current||2,244||5,555|
|Property and equipment, net||22,314||16,958|
|Other intangible assets, net||8,352||10,987|
|Deferred tax assets, non-current, net||--||447|
|Other assets, non-current||19||53|
LIABILITIES AND STOCKHOLDERS' EQUITY
|Accrued expenses and other current liabilities||5,248||9,492|
|Income taxes payable||13||350|
|Accrued warranty reserve||1,028||605|
|Current portion of long-term debt||128||265|
|Current portion of capital lease obligations||160||203|
|Total current liabilities||10,347||17,495|
|Capital lease obligations, non-current||144||369|
|Deferred tax liabilities, non-current, net||317||--|
|Other non-current liabilities||2,224||3,890|
|Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding||--||--|
|Common stock, $0.001 par value; 200,000,000 shares authorized; 52,596,170 and 51,215,653 shares issued and outstanding at December 31, 2010 and 2009, respectively||53||51|
|Additional paid-in capital||112,025||108,626|
|Notes receivable from stockholders||(38||)||(90||)|
|Accumulated other comprehensive loss||(80||)||(66||)|
|Total stockholders' equity||120,800||120,969|
|Total liabilities and stockholders' equity||$||133,917||$||142,969|
SOURCE: Energy Recovery, Inc.
Energy Recovery, Inc.
Tom Willardson, 510-483-7370
Chief Financial Officer